The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Two Harbors Investment Corp (NYSE:TWO).
Two Harbors Investment Corp (NYSE:TWO) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 32. TWO investors should be aware of an increase in activity from the world’s largest hedge funds lately. There were 30 hedge funds in our database with TWO positions at the end of the second quarter. Our calculations also showed that TWO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a look at the latest hedge fund action regarding Two Harbors Investment Corp (NYSE:TWO).
Jeffrey Tannenbaum of Fir Tree
Do Hedge Funds Think TWO Is A Good Stock To Buy Now?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TWO over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Two Sigma Advisors was the largest shareholder of Two Harbors Investment Corp (NYSE:TWO), with a stake worth $28 million reported as of the end of September. Trailing Two Sigma Advisors was Sculptor Capital, which amassed a stake valued at $17.5 million. Citadel Investment Group, Fir Tree, and Glazer Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Centiva Capital allocated the biggest weight to Two Harbors Investment Corp (NYSE:TWO), around 0.62% of its 13F portfolio. Fir Tree is also relatively very bullish on the stock, dishing out 0.37 percent of its 13F equity portfolio to TWO.
As aggregate interest increased, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, created the largest position in Two Harbors Investment Corp (NYSE:TWO). Millennium Management had $1.9 million invested in the company at the end of the quarter. Andy Redleaf’s Whitebox Advisors also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new TWO investors: D. E. Shaw’s D E Shaw, Andrew Weiss’s Weiss Asset Management, and Donald Sussman’s Paloma Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Two Harbors Investment Corp (NYSE:TWO) but similarly valued. These stocks are Oasis Petroleum Inc. (NASDAQ:OAS), 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), Equinox Gold Corp. (NYSE:EQX), HUYA Inc. (NYSE:HUYA), Columbia Financial, Inc. (NASDAQ:CLBK), Stagwell Inc. (NASDAQ:STGW), and Latham Group Inc. (NASDAQ:SWIM). This group of stocks’ market caps resemble TWO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OAS | 19 | 224452 | -4 |
| FLWS | 18 | 61856 | -6 |
| EQX | 13 | 56083 | -3 |
| HUYA | 11 | 22547 | 0 |
| CLBK | 10 | 49128 | -1 |
| STGW | 10 | 111580 | 10 |
| SWIM | 10 | 69466 | -5 |
| Average | 13 | 85016 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $156 million in TWO’s case. Oasis Petroleum Inc. (NASDAQ:OAS) is the most popular stock in this table. On the other hand Columbia Financial, Inc. (NASDAQ:CLBK) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Two Harbors Investment Corp (NYSE:TWO) is more popular among hedge funds. Our overall hedge fund sentiment score for TWO is 85.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately TWO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TWO were disappointed as the stock returned -7.3% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Two Harbors Investment Corp. (NYSE:TWO)
Follow Two Harbors Investment Corp. (NYSE:TWO)
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Disclosure: None. This article was originally published at Insider Monkey.
